Good Debt versus Bad Debt

Debt: this is a word which often evokes negative feelings and is associated with poor financial decisions. However, having debt is not necessarily a bad thing. While we all wish we had the money to make big purchases or invest without going into debt, the reality is that it is not always possible. In some cases, it is therefore financially smart to take a loan.

The truth is that almost everyone will have to take a loan at one point or the other. But how do you tell that a loan is the best move to make? How do you tell if the cost of interest is worth the benefits? Well, as a rule of thumb, a good debt benefits your financial future while a bad debt harms it. In addition, all debt is bad debt if you can’t afford to pay it.